Not All Logistics Real Estate Is Created Equal

When the supply chain extends from the point of production to the doorstep, the way we talk about logistics real estate inevitably changes. We’ve seen this already with the term “last mile.” Last-mile fulfillment is not the literal measurement of distance but encapsulates the final leg of delivery, which can vary dramatically from city to city (San Francisco compared to Houston, for example).

Proximity to major population centers isn’t the only factor to consider in characterizing buildings. With a range of features and locations, properties can have widely different purposes, yet current industry definitions seldom go farther than “warehouse / distribution” and “flex.”

Here’s what we do know: Not all logistics real estate is created equal. Given the growing demand to secure the right building in the right location to meet rising expectations from the end consumer, a common language is needed to describe the different types of logistics real estate. Ideally, this would utilize site selection criteria to more efficiently match properties with companies’ supply chain needs.

Today’s industrial real estate requirements have already changed from the big box spaces from 20 years ago to match the modern supply chain. Will the way we talk about logistics real estate change as well?